Valuations and Appraisals

Sworn Licensed Appraisals and Real Estate Valuations in Brazil

Dr. Andreas Hahn is a licensed and sworn appraiser in Brazil, specialized on the elaboration of value appraisals of properties (Laudo técnico de avaliação) in Portuguese and English language, also for international use. He is an expert who performs real estate appraisals following the ABNT standard, NBR 14653, to ensure the technical and legal validity of their work. This standard establishes the procedures for appraising assets, including urban and rural properties, and must be performed by accredited and qualified professionals, such as engineers, architects, and real estate agents registered with the National Registry of Real Estate Appraisers (CNAI). The result is a technical report, such as the Technical Market Appraisal Opinion (PTAM) or Appraisal of Market Evaluation of urban/rural properties, which serve as a technical-scientific documents and may be valid in court.

Types of Valuations:

• Economic/commercial appraisals: aiming at establishing the specific market value of a property, including infrastructure parameters and taking into consideration domestic as well as international demand factors. These appraisals usually represent a tool for owners to have a better understanding of the value of their property and then position it on the market
• Court Appraisals: These are specific types of valuations and appraisals, that can be used, also internationally, for legal procedure. Common types are appraisals subsequent to inheritance/heritage legal processes (for example inventories in case of death, divorce etc.)
• Potential and Value Projection Appraisals: These valuations aim, besides establishing the commercial status quo (current market price) at calculating and projecting future values and value developments, considering all possible value-influencing factors that may occur over a certain determined period (most commonly 5 – 10 years).
• Rentability Appraisals: This fourth forms incorporates estimations based on economic parameters of the economic rentability (return on investment) of properties, for example projected rental income, value increase combining variables like rentals, gradual valuations etc.

Regarding legal validity, Dr. Hahn can do simple non-sworn economic appraisals as well as sworn appraisals for court presentation.

Method:

The method that we apply conforms to Brazilian regulation and a specific standard, the NBR 14653, which defines the technical parameters of an appraisal. It comprises several elements and layers of analysis, starting by describing and evaluating the property by its physical characteristics, quality of construction, economic potential and revenue generating (in case of commercial properties). We then perform a comparative analysis, comparing the commensurable offers, past sales, current listings in order to get a context understanding. This is partially performed by internet research, but also interviews with real estate companies and notary offices. Finally, we included contextual parameters and infrastructural components that influence the value/valuation of a property, like proximity to points of interests, amenities of daily life etc. We also include a dynamic market model, that is incorporating domestic and international demand structures (for example regions with high international demand lead to higher property prices).

In average the duration (elaboration of the appraisal) takes approximately one week,  depending on the circumstances and also the urgency. We give also a 6 months guarantee, during which addendums and alterations can be added to the appraisal without additional cost.

References:

Brazilian Guideline for the Elaboration of Appraisals (dated march 2024), published by the Patrimonio da União, according to the NBR 14653 standard:

• https://www.gov.br/gestao/pt-br/assuntos/patrimonio-da-uniao/avaliacao-de-imoveis-da-uniao/manual-de-avaliacao-de-imoveis-2024-r3-final.pdf

An overview over methods regarding real estate evaluations, published by Mato Grosso do Sul Federal University:

• https://proadi.ufms.br/files/2023/07/Guia_Metodos_de_Avaliacao_de_Imoveis.pdf

Valuations and Appraisals Brazil